
Les Mills International Club Owner CVM Report. February 2008. CVM Overview. Image & Reputation. Les Mills business processes. Customer view. Customer process. Les Mills process. Customer Value Management (CVM). Customer process. Les Mills process. Products & Services. Customer process.
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February 2008
Les Mills business processes
Customer view
Customer process
Les Mills process
Customer Value Management(CVM)
Customer process
Les Millsprocess
Products & Services
Customer process
Les Millsprocess
Les Millsprocess
Customer process
Prices & Costs
Les Millsprocess
Customer process
Les Millsprocess
Customer Value Management is based on customer trade offs between what they get and how much they pay, organised around customer facing processes and linked to internal business processes so pragmatic changes can be implemented
The link with business processes is vital as these processes are the levers that managers can use to change customer perceptions of value and ultimately impact EBIT
Business processes…(across LMI and its agents)
…influence customer perceptions of Les Mills performance…
…to provide clarity as to where Les Mills can focus its business improvement efforts and quantify what's at stake…
…which are modelled…
HR
e.g. Initiative: Improve Programme Quality
Operations
Finance
Sales and Marketing
Customer Service
EBIT Impact
We also know that what is important to customers can vary across their lifecycle so we also measure the key decision criteria customers use when deciding to spend on Les Mills programmes
Performance on Key Decision Criteria determine likelihood to spend with Les Mills
High
Level of consideration given to selection / changing Group Fitness Provider
Customer perceptions (as shown by CVM) determine likelihood to change spend levels
e.g. Renegotiation of contract, bad service experience, new entrant in the market
New Relationship
Trigger Point
Trigger Point
Low
Time
Image and Reputation
xx% x.x ± xx
1
Absolute performance
1=poor, 10=excellent
CVM is a measure of the markets perceptions – as a result CVM scores take time to move as perceptions lag actions and therefore slowly change over time
CVM
x.x ±xx
Products and Services
xx% x.x ± xx
2
Change relative to 2004 survey
3
Level of impact of driver
0-100%
Prices and Costs
xx% x.x ± xx
Impact weights vary by CVM model and by competitor
In addition to the customer value data, we collected data on key decision criteria, other business issues and information about the customers’ businesses as part of the survey
Key Decision Criteria
Other Business Issues
Other Business Information
The purpose of collecting this information is to form action plans to maximise profitability across the lifecycle, which because of the supply chain for Les Mills programmes, are undertaken by either LMI and / or the agent
Les Mills CVM Action Framework
Actions that need to be carried out across all markets e.g. addressing programme quality issues
Actions that need to be carried out on a market by market basis but are common across markets e.g. addressing price issues
Global
Scope of Action
Actions that can only be carried out by LMI to address a particular issue in market e.g. change to programme content to address individual market issue
Actions that need to be carried out to address issues particular to individual markets e.g. addressing billing issues
Local
LMI
Agents
Implementation of Actions
Response rates from the clubs were good enabling detailed information to be provided for seven markets – Australia, Brazil, France, Germany, the Netherlands, Baltic and U.S.A. – and indicative results for Japan
The Netherlands 83 responses
Baltic 92 responses
Germany
59 responses
Total Sample = 649
China 1 response
France74 responses
Japan 19 responses
USA 151 responses
Brazil88 responses
Spain2 responses
Australia81 responses
The United States did not participate in the last CVM study and as a result this sample is different to the last study and this will influence the results shown
The USA is very sensitive to prices and costs, evenly split between financial and non-financial costs, but performance on these drivers outperforms other markets
Insights and Implications
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
The US is the strongest performing country with all aspects significantly higher than the market averageOverall CVM Performance(1)
Insights and Implications
Image and Reputation
Perceived value ofLes Mills products to clubs
Perceived value of the Les Mills system to clubs
Perceived value of the Les Mills systems to clubs
Products and Services
Prices and Costs
Note: (1) Sample size n = 151
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
Image and reputation is a real strength within the US, especially in having a reputation for technical and leading edge programs which is of particular importance to US clubs
Image and Reputation CVM Performance(1)
Insights and Implications
Recognised brand
Brings in and retains customers
Image and Reputation
Recognised as effective and safe
Fair, likeable and credible people
Technical and leading edge
Note: (1) Sample size n = 151
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
Products and services generally perform very highly, especially the actual programs themselvesProduct and Services CVM Performance(1)
Insights and Implications
Getting set up and going
Using the programs
Products and Services
Using the services
Account management
Billing
Note: (1) Sample size n = 151
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
Getting set up and going currently has no impact on perceived value but performance is high on all aspectsGetting Set Up and Going CVM Performance(1)
Insights and Implications
Providing me with training and education on programs
Providing me with programs that suit my needs
Agreeing a fair and reasonable contract
Getting set up and going
Assisting me with launching my programs
The initial training of my staff
Providing training and education to run Group Fitness
Note: (1) Sample size n = 151
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
Performance across all subdrivers connected with using the programs is very strongUsing the programs CVM Performance(1)
Insights and Implications
Ensuring ongoing quality of programs
Ensuring programs are innovative and exciting
Using the programs
Providing programs that generate a return on investment
Providing updated programs on a timely basis
Providing programs and training to recruit and retain the best instructors
Note: (1) Sample size n = 151
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
Using the services within the Les Mills system is important to US customers and although still relatively good, performance is lower than on other drivers
Using the Services CVM Performance(1)
Insights and Implications
Providing assistance with marketing any programs
Training my instructors
Using the services
Assisting me in keeping my staff happy and motivated
Assisting me with measuring the success of my programs
Providing certification of my instructors
Note: (1) Sample size n = 151
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
United States performs well on account management which suggests the “club coach” system is working wellAccount Management CVM Performance(1)
Insights and Implications
Committed to my business
Available when I need them
Provide me with information when I need
Account management
Assist me in sorting out issues related to my programs
Respect me as a valued customer
Proactively contacting me to add value to my business
Note: (1) Sample size n = 151
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
As in other markets billing is a strength with the USA agents on all aspectsBilling CVM Performance(1)
Insights and Implications
The bills I receive are accurate
The bills I receive are simple to understand
Billing
There is a convenient payment system
Ensuring confidentiality of financial arrangement
There are fair payment terms
Note: (1) Sample size n = 151
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
Prices and costs performs very well compared to all other countries, which is likely to be related to the high rates of the programs for generating a return on investment
Prices and Costs CVM Performance(1)
Insights and Implications
Financial Costs
Prices and Costs
Non Financial Costs
Note: (1) Sample size n = 151
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
All aspects of financial costs have a large impact on overall perceived value with performance being relatively good, compared to other countries, across all factors
Financial Costs CVM Performance(1)
Insights and Implications
Licence Fee
Financial Costs
Costs of setting up the program such as marketing and training
Costs to use the program eg music, video, headsets, uniforms, training etc
Note: (1) Sample size n = 151
Process
xx% x.x
Key:
Impact Weight
2007 CVM Score
In general customers perceive performance of the US operation to be good in respect of non financial costs, although improving the convenience of workshops should be investigated
Overall Non Financial Costs CVM Performance(1)
Insights and Implications
Time and effort involved in setting up the program
Time and effort in operating the program
Non Financial Costs
Managing the resistance from staff eg instructors
Convenience of workshops
Note: (1) Sample size n = 151
Customers Views on the Main Competition for Les Mills programs(1)(2)
Note: (1) Sample size n = 145
Les Mills Score x 100
Competitors Score 1
USA
Process
x.x
Key:
2007 RVS Score
Where competition does exist in the US market, Les Mills programs outperform it on all aspects of customer value drivers leaving only 3% of the customer base at risk
Customers Views of Les Mills programs Main Competition(1)(2)
Likelihood to Reduce Usage of Les Mills programs in the Next 12 Months(3)(4)
Image and Reputation
3% of customer base at risk
Products and Services
Perceived Value of Competitors Products to Clubs
Proportion Expecting to Decrease Number of Les Mills programs Used in Next 12 Months
Prices and Costs
Overall Perceived Value
Notes: (1) Excludes responses that say there are “no competitors”; (2) Sample size n = 151; (3) Customers who rated 8 to 10 on a scale of 1 to 10 where 1 = ‘not likely” and 10 = “highly likely”; (4) Sample size n = 151
As in other markets it is the programs contribution to attracting and retaining members, together with the image and quality of the programs which is most important to buyers, and performance is rated highly on all factors
Insights and Implications
Price ranks sixth with an 8% weighting